SAP can do more

SAP has grown enormously in recent years and the challenges facing SAP have also increased. In this mixture of defending market share, protecting investments for existing customers, innovation and competition with IT competitors and cooperation with friends, a large ERP offering has emerged, both in terms of breadth and depth.

In the beginning, SAP was an ERP programmer. The focus was on standard business software. SAP left tasks such as data storage and management to database providers such as Oracle, IBM and Microsoft. The necessary middleware was available as WebSphere from IBM, among others - before SAP NetWeaver was activated. The software modules of SAP R/3 were well-organized and manageable.

In the years that followed, SAP proved that the company could do more than just offer an ERP black box system. The NetWeaver middleware and the Hana database were visible to everyone. However, this was also where the problems began: NetWeaver was Abap-oriented, then Java was added and then there was the "famous" dual stack, which was subsequently dissolved again with great effort. SAP can do almost anything, but it often lacks orchestration and value.

What is often a small step in SAP's labs incurs high costs for existing customers: even small adjustments to the ERP strategy mean repeated testing, adapting external interfaces and legacy programs as well as extensive user training. SAP can do a lot and more, but not always to the benefit of its own existing customers.

What may be an elegant algorithm for the computer scientist at SAP can cause an entire organizational structure and process organization to collapse for the user. SAP - driven by competitors and financial analysts - is often unpredictable for existing customers, so that the benevolent and positive "SAP can do more" can turn into the opposite. And: SAP is increasingly suffering from speechlessness! Communication and trust between SAP and its customers have been damaged for many years.

This year, the DSAG user association and SAP jointly invited existing customers to take part in the annual investment survey: There were only just over 200 responses from the entire German-speaking region. What do the silent majority of existing SAP customers think? Have those who refuse to communicate already signed up to Oracle, Workday, Salesforce and ServiceNow?

The SAP share price gives cause for joy and hope, but on closer inspection SAP can do more and is as innovative as it was at the beginning of the company's history. What now? The ERP offering has multiplied in recent years. The communication and transmission of the good news is tending towards zero, which ultimately costs market share and business success, as the English-language business magazine The Economist has noted: "AI agents are turning Salesforce and SAP into rivals. Artificial intelligence is blurring the distinction between front office and back office."

The market research company Gartner assumes that between 2020 and 2024, competitors such as Workday will have reduced SAP's share of the ERP business from 21% to 14%. Despite efforts such as SAP C/4 Hana (the
"C" here stands for CRM) in the front office sector, CRM sales declined during this period, while Salesforce was able to maintain its 20 percent share of a growing market. What is happening here? 

More than a quarter of companies in Germany assume that AI will lead to job losses in the next five years. Companies expect structural change to be accelerated by AI.

SAP has agreed a promising AI cooperation with Nvidia. With BTP (Business Technology Platform) and BDC (Business Data Cloud), the ERP provider is involved as a platform supplier. In the IT sector, users will find graph and vector computing engines at SAP alongside the Hana database platform. SAP can do more!

However, SAP is currently bringing little of the innovations to existing customers because they are busy with an S/4 conversion and license agreements. Nobody can see the wood for the trees and there is no SAP roadmap through the undergrowth. The challenge is to translate the resulting productivity gains of the SAP offering into broad prosperity - without creating major upheavals in the business structure and process organization of existing SAP customers.